Every other case in this part runs through a court, which means the operational work is largely invisible. Best Buy never filed. That is exactly why it belongs here: as a public company executing a turnaround in the open, it disclosed the actions, the sequencing, the resources and the results quarter by quarter. For studying effort translating into value, no docket comes close.
The story
By 2012 Best Buy was widely expected to follow Circuit City. Sales were falling, the prior CEO had resigned amid an investigation into his conduct, the founder was assembling a bid to take the company private, and the consensus view was that big-box consumer electronics had been reduced to a showroom for Amazon — customers browsing in store, then buying online for less.
Hubert Joly was appointed CEO in August 2012, an outsider with no retail background. He spent his first weeks working in stores rather than announcing a strategy. In November 2012 he presented Renew Blue, built on five pillars: improve the customer experience, energise employees, deepen vendor relationships, and increase return on investment through cost reduction and sales growth.
The effort, itemised
Price matching. From 2013, Best Buy matched online prices including Amazon's, year-round, and empowered store associates to apply it. It compressed gross margin and it stopped showrooming, which was the existential threat. This is the clearest example in the case of accepting a measurable cost to remove a structural one.
Ship-from-store. Opening store inventory to the online channel, eventually across roughly 1,400 locations. It expanded online product availability to include clearance and returned items previously stranded in a single store, and it cut delivery times sharply — by late 2013 average shipping time was reported as faster than Amazon's. Note what this is: an operational fix that converted the store base from a cost liability into a distribution asset, without capital expenditure on new infrastructure.
Vendor store-within-a-store. Deepening relationships with major suppliers so that they funded branded space inside Best Buy locations — turning vendors from adversaries in a margin negotiation into co-investors in the store experience.
Cost reduction. Over a billion dollars removed by the end of 2014 through management delayering, process simplification, supply chain efficiency, and reductions in returns, replacements and damages. A further programme targeted $400mm of cost reduction and gross profit optimisation.
Management system. Store managers had been measured against 40 to 50 KPIs. That was cut drastically. This is the least discussed and most transferable item: a turnaround requires that people know which three things matter.
The value, and why
Renew Blue was declared complete in 2017 and succeeded by a growth phase. The stock, which had fallen below $15 in late 2012, compounded substantially over the following years; revenue reached an all-time high of about $52bn in fiscal 2021, when the curbside pickup and ship-from-store infrastructure built during the Joly years met a pandemic that rewarded exactly those capabilities.
Why the value was there, stated honestly: the underlying business had a defensible reason to exist — customers genuinely want to see a large television before spending thousands on it, and genuinely want someone to set up the device afterwards. That is a real differentiated position, and it meant the operating problems were fixable. Compare Chapter 30: Bed Bath & Beyond's problems were not fixable by the time anyone tried, because the differentiated position had already been dismantled.
This is Chapter 1's distinction, demonstrated at both ends. Operational distress in a business with a durable competitive position responds to operational work. Operational distress in a business without one does not, and no restructuring changes that.
The numbers
Starting point. Stock below $15 in late 2012, a ten-year low. Founder attempting a take-private the board rejected. The consensus expectation was bankruptcy.
Cost. Over $1bn removed by the end of 2014 through management delayering, process simplification, supply chain efficiency, and reductions in returns, replacements and damages — followed by a further programme targeting $400mm of cost reduction and gross profit optimisation, against which about $150mm was realised in one reported year.
Revenue and channel. Domestic online revenue growing over 13% to more than $4bn at one point in the programme; ship-from-store rolled out to roughly 1,400 locations; average shipping time reported as faster than Amazon’s by October 2013. Revenue reached an all-time high of about $52bn in fiscal 2021, when the infrastructure built during Renew Blue met a pandemic that happened to reward exactly those capabilities.
The arithmetic that matters. Price matching was a deliberate, quantifiable margin sacrifice made to remove an unquantifiable existential risk. Build the trade: assume price matching costs 100–150 basis points of gross margin on $40bn of revenue and ask what share loss it had to prevent to be worth it. The answer is a small fraction of a point of share per year — which is why it was obviously correct in advance, and why almost nobody did it. Most turnaround decisions are of this shape: a certain, measurable cost against an uncertain, larger loss.
The documents to pull
All free on EDGAR. Pull the 8-K announcing Joly's appointment in August 2012, then the November 2012 investor day materials laying out Renew Blue, then the 10-Ks from fiscal 2013 through fiscal 2018 and read the MD&A sequentially. Quarterly earnings call transcripts fill in the detail on each initiative as it was rolled out and defended.
The exercise: build a table with one row per initiative — price matching, ship-from-store, store-within-a-store, cost programme, KPI reduction — and columns for the year announced, the stated cost, the stated benefit, and the observable result in the following two years' financials. Then mark which ones you could have judged correct at announcement and which required hindsight. That distinction is the entire skill of underwriting a turnaround plan.